The Ins and Outs of Form 1099
You've probably received a 1099-INT tax form from your bank. It signifies it paid interest on your savings. Another may come from your state, attesting to its tax refund to you. If you're a freelancer or contract worker, you may have received a 1099-MISC from your clients. And if you paid independent contractors more than $600 each in a given year, you need to complete a 1099-MISC.
You'll notice the forms have your Social Security number or taxpayer identification number, and that means the IRS will know that you've received money — and know whether you report that income on your tax return. Likewise, the IRS wants to keep tabs on the money you've paid contractors.
However, receiving the 1099 doesn't necessarily mean you will have to write a check to the IRS come April 15. You may have deductions that offset the income — expenses, for example — if you're a freelancer or contract worker.
So, which types of 1099 tax forms are likely to cross your path? Here's a list:
This is just a brief introduction to an important and versatile tax form. The actual tax you may have to pay depends on multiple factors. Be sure to save all your 1099 forms, as well as records of any 1099 forms you issued, to discuss with a tax professional.
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